Wednesday, July 21, 2010
Government Admits Health Care Bill is a "Tax" ... Oh, and the Bill Tracks and Taxes Physical Gold Transactions
When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”
And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.
Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.
Under the legislation signed by President Obama in March, most Americans will have to maintain “minimum essential coverage” starting in 2014. Many people will be eligible for federal subsidies to help them pay premiums.
In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.
Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.
And as ABC notes today, the bill contains a stealth provision requiring tracking - and thus tax reporting - of physical gold transactions:
[The health care legislation contains] a scarcely noticed tack-on provision to the law that puts gold coin buyers and sellers under closer government scrutiny.
***
Section 9006 of the Patient Protection and Affordable Care Act will amend the Internal Revenue Code to expand the scope of Form 1099. Currently, 1099 forms are used to track and report the miscellaneous income associated with services rendered by independent contractors or self-employed individuals.Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.
This provision, intended to mine what the IRS deems a vast reservoir of uncollected income tax, was included in the health care legislation ostensibly as a way to pay for it.
***
So every time a member of the public sells more than $600 worth of gold to a dealer, [Diane Piret, industry affairs director for the Industry Council for Tangible Assets, a trade association representing an estimated 5,000 coin and bullion dealers in the U.S.] said, the transaction will have to be reported to the government by the buyer.
***The ICTA's Piret says identity theft is another concern because criminals may set up shops specifically to extract personal information that would accompany the filing out of a 1099.
The office of the National Taxpayer Advocate, a citizen's ombudsman within the IRS, issued a report June 30 that said the new rule "may present significant administrative challenges to taxpayers and the IRS."
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Yeah, but they aren't necessarily targeting gold, it just gets swept up with all the rest. This was discussed at length a while back on some other financial blogs. It'll add unnecessary administration charges for small businesses. But then again, I'm not american and don't live in america, so don't care that greatly.
ReplyDeleteI guess the government thinks it's people has lost it's definition of "FREEDOM" FORCED is not FREEDOM! Show this out of control government you have had enough RESIST and then fire all of them! The republicans and Democrats are in the same bed people! Send the message WE no longer need you... all of you are fired!!!
ReplyDeleteThis is just a bloody mess and this is the CHANGE Obama was talking about, the change of controlling the bloody day lights out of all of us and our pocket books, he has never run anything. And is trying to run and ruining our lives for no bloody reason. So what else is new in Washington.
ReplyDeleteCongress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.
ReplyDeleteHow can you exceed your powers ????That surely would be unconstitutional??
just one more way they think they can control our lives and violate everything our "founding fathers" built this control on!
ReplyDeleteI wouldn't throw around the founding fathers too much. Washington himself required every male citizen to be a member of the militia and, as such, required every citizen to purchase his own gun, uniform etc. This was in effect until 1901, I believe. The government easily has the power to require citizens to purchase a given thing and, when they don't, to penalize them. There are some great debates and discussions concerning health care reform at http://www.ourblook.com/topic/healthcare.html which I have found interesting on these subjects.
ReplyDeleteThe tax and reporting problem does not kick in until you go to Sell your coins.
ReplyDeleteYou sell your coins to a dealer, he gives you the money and issues a 1099, which he forwards to the IRS. This gets cross-checked against your return.
The problem arises when trying to determine the basis, or original purchase price. As normal, “You buy $10,000 worth of gold and sell it for $12,000, you owe tax on $2,000 of capital gains”
The problem is the IRS requires DOCUMENTED PROOF of your basis, or what you originally paid for it.
How many of you can document exactly what you paid for every coin you ever purchased?
The kicker is that if no hard documentation exists, the long-standing IRS policy is that the basis is zero. Ergo, the whole $12,000 is treated as capital gains.
oldinvestor: The problem is worse than that!
ReplyDeleteGold does not rise or fall in value very much. Fact is, an ounce of gold has been able to purchase roughly the same goods for thousands of years.
In contrast, the US dollar is worth less than 1% of its value in 1913 when the blatantly unconstitutional FederalReserve was created.
Therefore, ALL taxes of "capital gains" are FRAUD perpetrated by government, because the claim of "profit" is based upon the "dollar", which decreases in value.
Gold is a good example. In 1933, you could trade a $20 dollar bill for a one ounce gold like the "the $20 gold piece"... duh. Today, you must trade $1250 dollars to get a one ounce gold coin. Since one ounce of gold buys roughly the same goods as in 1933, no REAL profit is made by holding gold. However, since the predators at the FederalReserve constantly and purposely DESTROY the value of the dollar (even though their assigned mission is to assure the value is maintained), they claim you made a profit of $1230 on the one ounce gold coin, and tax you 25% (or so, depending on situation). This is THEFT... pure, unadulterated THEFT.
They created this FICTIONAL profit by destroying the value of the dollar. After a given coin (or any item) is sold a few times, they tax more than 100% of the value of the item (10% to 25% each time)... effectively stealing more than the value of the item itself!
The predators-that-be must be arrested, tried and hung for 100 years of treason, crimes against humanity, destruction, racketeering, slavery and endless other obscene crimes. Wake up humans, wake up!